TCS share price hit a fresh record high of Rs 3,697 apiece, rising over 2 per cent in the intraday deals on BSE. With the new record high, Tata Consultancy Services has become the second listed company to top the Rs 13.5 lakh crore market capitalisation. The stock has surpassed its previous high of Rs 3,672.50, touched earlier this week. In last one year, TCS stock has delivered 64 per cent returns, ehile 25.24 per cent so far this year. In one month TCS stock has outperformed BSE Sensex, surging nearly 15 per cent, as compared to a 6 per cent rise in the benchmark index.
All IT stocks, especially the large-cap IT, have had a brilliant run in August thus far due to further digitisation leading to lower costs and expectation of improved financial results in the coming quarters, said an analyst. “Technically, TCS is very overbought and investors should book profit at current levels. Rs 3395-3440 will be good levels to re-enter this stock,” AR Ramachandran, Co-founder & Trainer, Tips2Trades, told Financial Express Online.
TCS market capitalisation is nearly 3 per cent away from Rs 14-lakh-crore-mark. Currently, the IT bellwether stands at second position in the overall market cap ranking, behind Reliance Industries Ltd (RIL) which has a market cap of Rs 14.51 lakh crore. TCS being the leader in the IT sector has gained from the continuous growth of the IT industry. This sector has been consistently performing well with continuous positive momentum. Analysts say that the main reason behind the positive momentum and healthy revenue growth are strong order bookings, broad based revenue growth and stable margins. The second reason for the healthy revenue growth for the company is the minimal impact of second wave of COVID-19 on the sectoras the work was easily managed from home, Ashis Biswas, Head of Research at CapitalVia Global Research, said.
Biswas strongly believes in the further growth of the IT sector as due to Covid-19 a lot of companies’ revenues declined and forced them to transfer jobs to developing countries where the charges are low. “This has benefited the company and hence helped them expand their customer base and increase the revenue. This pattern is likely to continue in the coming times as well as it has benefited the companies around the globe to get their work done efficiently at a lower price,” he added.
(The stock recommendations in this story are by the respective research and brokerage firms. Financial Express Online does not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)